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Volume XXVII, No. 30, November 6, 2015        

From the Law Offices of Garan Lucow Miller, P.C.

From the Editor: Sarah Nadeau

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COURT OF APPEALS HOLDS THAT STATUTORY PRIORITY PROVISION
IS NOT ALONE DISPOSITIVE OF WHETHER A NO-FAULT INSURER

IS REQUIRED TO PAY PROPERTY PROTECTION BENEFITS

By Christian C. Huffman

Home-Owners Insurance Company issued a no-fault policy to John Putvin.  The policy limited Home-Owners’ obligation to pay no-fault property protection benefits only to instances involving damage caused by vehicles that were listed on the policy.  Not listed on the policy was a 1966 Corvette, which Putvin owned but did not drive.  Putvin kept the Corvette in a storage facility, which also held personal property owned by persons insured by Meemic Insurance Company.  The Corvette caught fire while Putvin’s son was performing maintenance on it, and the fire damaged the personal property belonging to Meemic’s insureds.  After compensating its insureds for their loss Meemic filed a subrogation action against Home-Owners, alleging that MCL 500.3125 of the no-fault act required Home-Owners to pay property protection insurance benefits for the damage to Meemic’s insureds’ property even though the Corvette was not listed on the Home-Owners’ policy.

In the published decision of Meemic Ins Co v Home-Owners Ins Co, __ Mich App __ (2015), the Court of Appeals noted that MCL 500.3125 makes “insurers of owners or registrants of vehicles” – not insurers of vehicles themselves – first in priority to pay property protection benefits.  Thus, the Court acknowledged that, if viewed in isolation, MCL 500.3125 “requires an insurer to pay benefits whenever it has issued a no-fault policy to an owner of a vehicle involved in the accident, even if the policy did not specifically include coverage for that vehicle.”  See Titan Ins Co v American Country Ins Co, ___ Mich App ___ (2015)

Nonetheless, the Court determined that MCL 500.3125 must be read in conjunction with MCL 500.3101(1).  Section 3101(1) states that a no-fault insurer “may allow the insured owner or registrant of the motor vehicle to delete a portion of the coverages under the policy and maintain the comprehensive coverage portion of the policy in effect” with respect to “a motor vehicle that is not driven or moved on a highway.”  Noting that the Corvette was not being driven at the time of the accident, and in fact had been in storage for over a year, as well as the fact that Putvin had maintained comprehensive coverage for the Corvette with State Farm Insurance, the Court of Appeals held that Home-Owners was not statutorily required to provide property protection insurance coverage for the Corvette.

In other words, the Court of Appeals essentially recognized that MCL 500.3101(1) creates a limited exception to MCL 500.3125, thus permitting no-fault policies to exclude coverage for property protection benefits for damage caused by motor vehicles that are owned or registered to the insured, and are covered by a comprehensive policy, but are not driven or moved upon a highway.

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THE PORT HURON OFFICE OF GARAN LUCOW MILLER HAS MOVED

The new address is:

Harborside Office Center
1411 Third Street, Suite H
Port Huron, MI 48060

 All phone numbers remain the same.

 

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THE MERRILLVILLE, INDIANA OFFICE OF GARAN LUCOW MILLER IS MOVING

On November 7th, 2015, the new address will be:

8585 Broadway, Suite 480
Merrillville, IN 46410

All phone numbers remain the same.